Perhaps not what you think.
Tesla has been exhibiting mean-reverting behavior on some of its biggest moves.
The snapshot below reveals.
On June 22nd of 2016, Tesla’s stock dropped 10.45% and closed at 196.6~. Within 30 calendar days, not even trading days, it was trading close to two hundred thirty dollars.
Even on the spikes Tesla sometimes mean reverts. It did this on November 4th 2016 when its stock popped 11.17% and closed the day at $231.63 cents.
Now you may say why write about this now and what do the spikes or crashes have anything to do with bankruptcy.
It appears that due to large block players and option market makers ( and god knows who else ), the market positioning in Tesla is toxic. The price signals from spikes or falls don’t mean what people might think. This is another way of saying this that calling Tesla a fraud is insufficient. The market is also fraudulent. That is to say Tesla the stock is a fraud, and its stock price is a function of a fraudulent stock market not connected to reality itself.
That may sound like sour grapes, but it is based on sound reasoning. Since Tesla is connected to the state, it is a bit like saying a State itself is fraudulent and disfiguring the market. Can states go bankrupt? Yes, through default or hyperinflation, itself a form of default, but they can print as much money as needed even if it impoverishes its citizens. That is what Tesla is sort of doing on the back end, complicit with the help of governor jerry brown of California and US government that has grown too bloated for its and its citizens own good. So betting against Tesla is effectively betting against Musk, the state, the corrupt markets (large block fidelity and Ron Baron at Barron partners), as perhaps a few quantitative hedge funds too smart for their own good. They will all bite off their nose to spite the good function of fair markets. Either that or they have very little utility for money. I suspect the former, however.
In any event, why might I think Tesla is setting itself up for bankruptcy. Musk is evidently running scared. Promising everything under the sun to keep his bubble stock alive, since that is the only currency that keeps his failing plans from deep-sixing.
Musk, aided by the degeneracy of the markets, governments, and the customers he dupes, is up against it and he’s resorted to cheating his customers in a blatant grab for margins that just aren’t there.
Musk is a man without shame. A fraud lying at the hearty of the American crony capitalist system. Even betting against an obvious fraud comes with low chances of success.
The market couldn’t shut Tesla down because it is broken and shorting frauds isn’t a risk-free proposition.
Also, given Tesla’s stock trades on fantasy, the path to zero could be a bumpy one. Should it happen, it will be worth the bruises and scrapes to get rid of the Elon Musk abomination.